The purchase of raw materials on account in a process costing system is recorded with a:A. Debit to Purchases and credit to Cash. B. Debit to Purchases and a credit to Accounts Payable. C. Debit to Raw Materials Inventory and a credit to Accounts Payable. D. Debit to Accounts Payable and a credit to Raw Materials Inventory. E. Debit to Goods in Process Inventory and a credit to Accounts Payable

Question

Cullen Valenzuela

Business

8 November, 05:50

The purchase of raw materials on account in a process costing system is recorded with a:A. Debit to Purchases and credit to Cash. B. Debit to Purchases and a credit to Accounts Payable. C. Debit to Raw Materials Inventory and a credit to Accounts Payable. D. Debit to Accounts Payable and a credit to Raw Materials Inventory. E. Debit to Goods in Process Inventory and a credit to Accounts Payable

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Carlos Kirby · Answer 1

Answer: The purchase of raw materials on account in a process costing system is recorded with a "C. Debit to Raw Materials Inventory and a credit to Accounts Payable.".

Explanation: The purchase of raw materials must reflect an increase in the inventory of raw materials and an increase in the liability generated by the purchase on account.